Administrative procedures for the control of marketing practices - theoretical rationale and perspectives

The paper purports to analyze some features of administrative control of marketing practices with the help of concepts drawn from modern legal-theoretical debate. As a background a general overview of the traditional justifications for the creation of an administrative control system is presented. These justifications underline the insufficiency of other agencies of control, such as individual consumers, competitors, consumer organizations, public prosecutors, and self-regulatory bodies.The development of administrative control measures has obvious connections with modern legal-theoretical concepts like reflexive law and proceduralization. The theory of reflexive law highlights the fact that effective control presupposes a sufficient consideration of the autonomy of social systems. This leads to emphasizing a flexible negotiation approach of control authorities in order to increase efficiency by creating some degree of internal acceptance of the measures.Legal pluralism again sees the State disintegrating in a constellation of more or less autonomous governments with their own goals and interests. In such a disintegrated State an active consumer authority can, under certain preconditions, create new legal institutions in the consumer law field and thereby contribute to the development not only of consumer law but of general private law as well.

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Theoretische Begründung und Perspektiven für administrative Verfahren der Kontrolle von Marketingpraktiken

Zusammenfassung Der Autor analysiert einige Kennzeichen von administrativer Kontrolle von Marketingpraktiken und zieht dazu Konzepte der neueren rechstheoretischen Diskussion heran. Er prÄsentiert zunÄchst als Hintergrund einen überblick über die traditionellen Rechtfertigungen für ein administratives Kontroll-system. Diese Rechtfertigungen betonen die UnzulÄnglichkeit anderer Kontrollinstanzen, wie z. B. einzelne Konsumenten, Wettbewerber, Verbraucherorganisationen, öffentliche Anklage oder Instanzen der Selbstkontrolle.Die Entwicklung von Ma\nahmen der administrativen Kontrolle hat offenkundig Bezüge zu modernen rechtstheoretischen Konzepten wie reflexives Recht und Prozeduralisierung. Die Theorie des reflexiven Rechts betont als Voraussetzung für effektive Kontrolle, da\ die Autonomie sozialer Systeme ausreichend respektiert wird. Dies führt zur Notwendigkeit flexibler Verhandlungen zwischen Kontrollinstanzen, damit über ein hinreichendes Ma\ an interner Akzeptanz der Mittel, deren Effizienz gesteigert werden kann.Rechtlicher Pluralismus wiederum sieht den Staat zerfallen in eine Konstellation mehr oder weniger autonomer Teilregierungen mit jeweils eigenen Zielen und Interessen. In einem so aufgespaltenen Staat kann eine aktive Verbraucherbehörde unter bestimmten Bedingungen neue rechtliche Institutionen im Bereich des Verbraucherrechts schaffen und dadurch zur Entwicklung nicht nur des Verbraucherrechts, sondern des gesamten Privatrechtes beitragen.

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The paper was presented at the Third International Conference on Consumer Law in Canela, Brazil, March 1992.     

Risk Management for E-Cash Systems with Partial Real-Time Audit

We analyze coin-wallet and balance-wallet under partial real-time audit, and compute upper bounds on theft due to the fact that not all the transactions are audited in real time, assuming that everything else is perfect. In particular, we assume that the audit regime holds for innocent payees. Let v be the maximum allowed balance in a wallet, and 01 be the fraction of transactions that are audited in real time in an audit round. Assume one unit transactions. We show that the upper bound on expected theft for coin-wallet is lim₀^–2, while for plausible (similar) parameter choice the bound for a balance-wallet is O(exp(mv)), where 1<m. The former is nicely bounded for small transactions, however, the bound for balance-wallet can become huge in those cases where we require very small false alarm probability. We conclude that partial audit, may be suitable for coin-wallets with low denomination coins, and possibly for balance-wallet, when we may tolerate a relatively high false alarm rate, but it may be too risky for balance-wallet, where very low false alarm rate is required.     

Student Ethical Perceptions and Ethical Action Propensities: An Analysis of Situation Familiarity

Recently McCuddy and Peery (1996) have suggested that business students may not respond the same way to unfamiliar business ethical dilemmas as they would to more familiar academic ethical dilemmas. The purpose of this study was to present the same students with both unfamiliar business dilemmas as well as possibly more familiar academic dilemmas in order to examine this issue.Findings of the study revealed that students did not exhibit different perceptions of the unethical actions performed in the academic and accounting/business ethical vignettes. However, the students indicated that both they and their peers would be more likely to act unethically to resolve the dilemmas in the accounting/business cases than in the academic cases. This finding is troubling in that it suggests that students either feel less compelled to act ethically in business, or that they perceive that ethical standards in the business world are generally low when compared to their current educational environment. In addition, the students in the study maintained the same halo effect (i.e., the difference between an individual's perception of their likelihood of performing an unethical action compared to their perception of their peers' likelihood to perform the same unethical action) across the two types of ethical dilemma.     

A framework for thinking about Group Decision Support Systems (GDSS)

Strategic problem solving in organizations is a social process that disturbs established social relationships. Maintaining a negotiated social order is crucial to political feasibility and to emotional commitment from the participants in relation to a solution package. However, Group Decision Support Systems that attend overly to managing social order risk group think through bounded vision. This may be avoided if emotional commitment is also encouraged through participants experiencing the problem situation from multiple perspectives and in relation to alternative solution strategies. Commitment depends upon both means/ends rationality and procedural rationality. This acknowledges the balance in providing support to a group with respect to the negotiation of social order, with the more traditional group decision support for socially negotiating order out of the problem situation. This article argues that effective Group Decision Support Systems must attend to both aspects of creating order. OR modelling methods and the support that can be provided by modern micro-computers offer a new way forward—models can be toys that a group can play with together, enabling them to create knowledge as well as use it.     

Trust in Scientific Publishing

Trust is an important phenomenon to reduce organisational complexity and uncertainty. In the literature many types of trust are distinguished. An important framework to understand the variety and development of trust in organisations is provided by Zucker. She distinguishes three types of trust: process-based trust institutional-based trust characteristic-based trustIn this article we will add a fourth type: values-based trust.Similarly, it is customary in scientific communication to distinguish four main communication functions: registration archiving certification awareness.These types of trust and the communication functions offer somewhat similar classification schemes. In this paper we will elaborate on these classification schemes with the aim to analyse possible similarities or even mapping. Such similarities will allow drawing conclusions on the development of trust in a (virtual) organisation in general and the process of scientific communication as a special kind of a (virtual) organisation in particular.     

Can Ethical Organizational Character Be Stimulated and Enabled?: “Upbuilding” Dialog As Crisis Management Method

Crisis management can be simultaneously a content specific problem solving process and an opportunity for stimulating and enabling an organizations ethical tradition. Crisis can be an opportunity for ethical organizational development. Kierkegaardian upbuilding dialog method builds from within the internal ethical tradition of an organization to respond to crises while simultaneously adapting and protecting the organizations tradition. The crisis itself may not be a directly ethical crisis, but the method of responding to the crisis is built upon the ethical foundations of an organizations tradition. A limitation of this method is that it may be less applicable to organizations with questionably ethical traditions. The concept of upbuilding dialog is derived from Kierkegaard, but here is applied to organizational crisis management. The method is illustrated and discussed in the context of a wrongful death crisis of the Dana- Farber Cancer Institute, a nonprofit organization, and an economic survival crisis at Ben and Jerrys, a business organization.     

Justice: The root of american business ideology and ethics

Although there are many conceptions of Justice, these different perceptions can provide many interesting insights into a business person's ethical standards as well as that person's decision-making processes. Using the Bishops' Pastoral Letter on the U.S. Economy as the basis for asking questions about justice, twenty-four business executives were interviewed about their conception of justice. An analysis of these interviews reveals that this group of businesspeople operated under very different conceptions of Justice at the Macroenvironmental and Microenvironmental levels. This result has some interesting implications not only for those scholars concerned with business ethics but for everyone who has a stake in business education.Men are called good, chiefly on account of their Justice. Cicero, 56 B.C. Ideology is applied philosophy. Lodge, 1986 Richard McGowan, S. J. is an Assistant Professor of Operations and Strategic Management at Boston College. His research focus involves examining both the rationale behind business and public policy decisions as well as determining the effectiveness of these policy measures. Some of his recent publications include Deciphering the Japanese Import Quota, Policy Studies Journal (1988) and Public Policy Measures and Cigarette Sales: An ARIMA Intervention Analysis Study JAI Social Issues Management Volume (1989).     

Does Greater Amount of Information Always Bolster Attitudinal Resistance?

Previous research suggests that attitudinal resistance to information that challenges a prior evaluation increases with the amount of information underlying the prior evaluation. We revisit this proposition in a context in which a set of important claims about a target brand are presented either alone—a lower amount of isolated information—or along with other favorable, but less important claims—a higher amount of embedded information. Results from two experiments show that when the challenge occurs immediately after the initial evaluation, a greater amount of embedded initial information does produce greater attitudinal resistance. However, when the challenge occurs after a delay, a lesser amount of isolated information produces greater attitudinal resistance. The findings qualify previous assumptions about the role of prior information in attitudinal resistance, and support a constructive view of judgment revision and attitudinal resistance.     

Consumer protection in Switzerland by means of “soft law” — Practices and perspectives

Consumer protection by self-regulation has come into focus as a proposed alternative to consumer legislation. This paper tries to show the principal forms in which soft law rules have been established in Switzerland, and to outline some of the main problems to which they have been exposed in practice.To a great extent self-regulation has centered, up to now, in the hands of the trade itself, although consumer organisations participate in some commissions for extra-judicial settlement. The principal deficiencies of self-regulation concern its enforcement and its scope of applicability when the trade is organised only to a limited extent. It has also been prowed that the drawing up of soft law rules has hindered legislation and, in some instances, also court practice.The authors come to the conclusion that some of the conditions without which soft law cannot achieve an effective impact on the trade are missing in Switzerland. However, positive contributions of soft law to consumer protection can sometimes be discerned where legislation has not succeeded.

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Zusammenfassung Die Schwierigkeiten, denen die Verbrauchergesetzgebung auch in der Schweiz begegnet, haben dazu geführt, dass die von der Wirtschaft als Alternative vorgeschlagene Selbstkontrolle stärker in den Mittelpunkt des Interesses gerückt ist als bisher. Der Artikel versucht — soweit ersichtlich, erstmals —, die verschiedenen Erscheinungsformen von soft law in der Schweiz aufzuzeigen und die wesentlichen Schwierigkeiten herauszuarbeiten, denen es in der Praxis begegnet.Die Selbstkontrolle der Wirtschaft bei Verbrauchergeschäften liegt zum grossen Teil ausschliesslich in den Händen der Wirtschaftsverbände. Die Verbraucherorganisationen beteiligen sich an ihr, auch aus finanziellen und personellen Gründen, nur zurückhaltend, wobei der Schwerpunkt dieser Beteiligung in der aussergerichtlichen Streitbeilegung und nicht in der Erarbeitung von materiellrechtlichen Regeln zu finden ist. Der Staat ist bis heute nur in einem Einzelfall interveniert, um eine effektive Selbstkontrolle zu gewährleisten.Die Hauptschwächen von soft law betreffen seine Durchsetzung und die Weite seines Anwendungsbereichs, zumal die verschiedenen Branchen in der Schweiz nur teilweise in repräsentativen Wirtschaftsverbänden organisiert sind. Bedenklich ist insbesondere der negative Einfluss, den soft law-Regelungen auf die Fortentwicklung der Verbrauchergesetzgebung und teilweise auch der Rechtsprechung ausgeübt haben.Einige unabdingbare Voraussetzungen für einen effektiven Verbraucherschutz durch Selbstkontrolle sind in der Schweiz nicht gegeben. Gleichwohl trägt das soft law vornehmlich in den Bereichen zum Verbraucherschutz etwas bei, in denen eine Gesetzgebung bisher nicht möglich war.

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Bernd Stauder is Professor of Law at the Faculty of Law, University of Geneva, Place de l'Université, CH-1211 Geneva 4, Switzerland. Joachim Feldges is a Research Assistant. Peter Mülbert is a former Research Assistant at this Faculty.Michael Bühler, Geneva/Düsseldorf, furnished an important contribution when the paper was first prepared.This article is a shortened version of the German original text, published under the title Praxis und Perspektiven von Konsumentenschutz durch soft law in der Schweiz in Zeitschrift für Schweizerisches Recht 1984 I. The authors are grateful to John Perry for translating the original German text into English.     

Board-management relations in small firms: The paradox of simultaneous independence and interdependence

The author introduces constructs based on neo-classical and socio-economic assumptions, and argues that board-management relations should be characterized by both independence and interdependence. Interdependence is especially important in small firms. The article presents a model of directorates from research about directorates based on agency theory assumptions. This model is supplemented with constructs from the theory of contractual relations. Whilst traditional literature tends to focus upon independence from an agency theory perspective, this article argues that it is necessary to use more than one dimension of attributes regarding the board-management relations in order to understand the board's contribution to company performance, and that trust and solidarity is especially important in small firms. Board-management relations described by simultaneous independence and interdependence are proposed to give the highest contribution to company performance. The theoretical propositions are exemplified and supported by results of a field survey of directorates in small firms.     

Ethics and the professional responsibility of lawyers

Applied ethics is sometimes understood on the engineering model: As engineers apply physics to human problems, so philosophers apply ethics to dilemmas of professional practice. It is argued that there is nothing in ethics comparable to physics. Using legal ethics as an example, it is suggested that political philosophy provides a better approach to understanding professional ethics. If, for example, the adversary system is a legitimate social institution, and if attorneys must adhere to certain principles in order for that institution to fulfill its purposes, then attorneys may be said to be subject to those ethical principles. Kenneth Kipnis is Professor of Philosophy at the University of Hawaii at Manoa. He is the author of Legal Ethics (Prentice-Hall, 1986), editor of several volumes on legal, social and political philosophy, and co-author of the Code of Ethical Conduct of the National Association for the Education of Young Children.     

Business regulation,business ethics and the professional employee

The differences in business reactions to legal regulation, and the nature of business moralities, are examined through the eyes of an expert group — in-house lawyers. The research indicates that lawyers inevitably provide a degree of control through their technical expertise, but that they also identify strongly with their companies and emphasise shared ethics rather than ethical differences between lawyers and their employers. This can partly be explained by their integration with the company but also rests on the problematic nature of law and regulatory controls in relation to organisations within the community. In-house lawyers therefore reject a policing role in favour of a counselling role. Since they perceive themselves as part of a shared culture of ethics, they also avoid a leadership role. However, the article suggests that the nature of legal judgment should assist lawyers towards such a role, while recognising that organisational statesmanship must be constrained by organisational culture and the wider community culture of ethical standards. Dr Karl J. Mackie is Director of the Centre for Legal Studies in the University of Nottingham, where he lectures in employment law and in management skills development. Lawyers in Business: and the Law Business is published by Macmillan (London) 1989. Dr Mackie is a member of the Business Strategy Network and a consultant in business strategy.This paper has been adapted from Mackie, Lawyers in Business: and the Law Business (1989), (London: Macmillan), ch. 10.     

From Adam Smith to the American Catholic bishops: Debating visions of economic life

Considerable controversy was stirred by the contrast between the specific approaches to public policy contained in the first draft of the Catholic bishops' letter on the U.S. economy and the policies favored by the Reagan administration. However, a much more basic contrast actually existed between the bishops' underlying vision of economic life and contemporary capitalism. The pastoral challenges a separation between moral criteria and economic activity that is deeply embedded in modernity itself. Indeed, the splitting off of economic life from its moral-religious matrix is seen by the bishops' critics as a positive, defining feature of democratic capitalism. The critics see the separate economic and moral-religious spheres related by due balance; the bishops, while acknowledging an autonomy to economic life, emphasize that its fundamental choices remain moral. The bishops (and, for different reasons, their critics) have preferred to minimize the contrast between the letter's vision and the contemporary economy. They avoid any clearcut judgment on the economic system by stressing pragmatism and reforms; but implicitly they are granting a strictly conditioned acceptance of reformist capitalism, the condition being the system's openness to questioning and change. Peter Steinfels is Editor of Commonweal Magazine and he is the author of The Neoconservatives (Simon and Schuster, 1979).     

Entscheidungsbedingte Kaufkraftverluste: Formen,Umfang und verbraucherpolitische Relevanz

Zusammenfassung Entscheidungsbedingte Kaufkraftverluste treten dann auf, wenn Verbraucher wegen beschränkter Markttransparenz Kaufentscheidungen treffen, die zu finanziellen Einbußen fürhren. Am Beispiel von drei verbraucherinformationspolitischen Maßnahmen werden Formen und Umfang entscheidungsbedingter Kaufkraftverluste herausgearbeitet. Vielleicht gelingt es, mit Hilfe dieser Kaufkraftverluste erste Auswahlkriterien und erste Ansätze einer Erfolgskontrolle im Rahmen der Verbraucherpolitik aufzuzeigen. Vielleicht gelingt es aber auch, dem Verbraucher den potentiellen finanziellen Schaden uninformierten Kaufentscheidungsverhaltens vor Augen zu führen, in der Hoffnung, daß er nun eher dazu motiviert ist, sich nicht nur bei extensiven Kaufentscheidungsprozessen informationsaktiver zu verhalten.

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Monetary losses caused by uninformed purchase decisions: About their implications for consumer policy and various ways of calculating them

Frequently, the uninformed consumer makes buying decisions which differ from the decisions of the information seeker. Often, this takes the form of products with a higher price but not corresponding improvement of quality being chosen, or products with a lower quality but no corresponding reduction in price. In both cases, the uninformed consumer suffers a monetary loss (a loss in money income, Morris & Bronson, 1970).In this paper, three ways of calculating such a monetary loss are presented. Two of these are taken from the literature (Granger & Billson, 1972; Russo, 1977) and concern the calculation of real losses which result from the choice of unnecessarily expensive products, owing to difficulties in calculating and comparing unit prices, when stores do not make these extremely manifest. The third calculation concerns a more hypothetical entity, the potential loss that can be incurred by choosing the most expensive brand in a product class rather than the cheapest of those brands which have been rated as very good by the German product-testing agency Stiftung Warentest. In turns out that these potential losses are oftentimes very large. The author is of the opinion that the relative size of these losses can be used for selecting those classes of products where the need for consumer actions, above all for information about prices and qualities, is particulary urgent. Furthermore, the efficiency of such actions can be measured in terms of changes in the size of the losses. The consumers themselves might also be induced towards more extensive pre-purchase search, were they made aware of the size of these potential losses.

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Udo Beier ist Professor für Wirtschaftslehre des Haushalts und Verbraucherpolitik an der Universität Hamburg, Fachbereich Erziehungswissenschaft, Von-Melle-Park 8, D-2000 Hamburg 13.     

Wisdom Paradigms for the Enhancement of Ethical and Profitable Business Practices

Many organizations continually search for new business models and ways to conduct business ethically, yet profitably. Kirk Cheyfitz (2003) proclaims that organizations should not waste time trying to create new business models because the rules of commerce never change. Instead of searching for new business models, organizations can improve business practices by looking at different paradigms or mental models for seeing how to build practices that lead to long-term success. The employment elements of wisdom as paradigms for developing sound structures and practices that will encourage management behaviors that are ethical and lead to profitability. First, a theory of wisdom is developed. Then, the elements of wisdom are applied to the design of a general business structure and to refocusing some basic business practices.     

The Methods Used to Implement an Ethical Code of Conduct and Employee Attitudes

In the process of implementing an ethical code of conduct, a business organization uses formal methods. Of these, training, courses and means of enforcement are common and are also suitable for self-regulation. The USA is encouraging business corporations to self regulate with the Federal Sentencing Guidelines (FSG). The Guidelines prescribe similar formal methods and specify that, unless such methods are used, the process of implementation will be considered ineffective, and the business will therefore not be considered to have complied with the guidelines. Business organizations invest enormous funds on formal methods. However, recent events indicate that these are not, by themselves, yielding the desired results. Our study, based on a sample of 812 employees and conducted in an Israeli subsidiary of a leading multinational High-Tech corporation headquartered in the US, indicates that, of the methods used in the process of implementation, one of the informal methods (namely, the social norms of the organization) is perceived by employees to have the most influence on their conduct. This result, when examined against employee tenure, remains relatively stable over the years, and stands in contradistinction to the formalistic approach embedded in the FSG. We indirectly measure the effectiveness of the percieved most influential implementation process methods by analyzing their impact on employee attitudes (namely, personal ethical commitment and employees' commitment to organizational values). Our results indicate that the informal methods (manager sets an example or social norms of the organization) are likely to yield greater commitment with respect to both employee attitudes than the formal method (training and courses on the subject of ethics). The personal control method (my own personal values) differs significantly from all the other methods in that it yields the highest degree of personal ethical commitment and the lowest degree of employees' commitment to organizational values.     

50 Jahre Steuerschätzung: Die Notwendigkeit einer undankbaren Aufgabe

Der vom Bundesministerium der Finanzen im Jahre 1955 eingerichtete Arbeitskreis Steuerschätzungen besteht mittlerweile 50 Jahre und tritt im Mai 2005 in Berlin zu seiner 125. Sitzung zusammen. Was sind die Aufgaben des Arbeitskreises? Mit welchen Problemen muss er sich bei seiner Arbeit auseinandersetzen?Dr. Klaus-Peter Fox, 60, ist Dozent für die Fächer Volkswirtschaftslehre und Finanzwissenschaft an der Fachhochschule für Verwaltung des Saarlandes. Er ist seit Herbst 1983 Mitglied des Arbeitskreises Steuerschätzungen. Er vertritt ausschließlich seine persönliche Meinung.     

Where Did They Go Wrong? An Analysis of the Failure of Knowledgeable Internet Consumers to Detect Deception Over the Internet

This paper uses an information-processing model of deception detection to understand the reasons underlying Internet consumers' success and failure at detecting forms of intentional deception that occur on the Internet. Eighty MBA students visited either a real commercial site or a deceptive copycat (page-jacking) site. The deceptive site was identical to the clean site except that it contained six deceptive manipulations (e.g., forged favorable quotes from authoritative sources). This study compares the information processing behavior of four groups of subjects: those who detected the deception, those who missed it, those who correctly identified the real site as non-deceptive, and those who incorrectly believed that the real site was deceptive. It was found that (1) priming subjects to generate the hypothesis of deception weakly facilitates detection success, (2) competence at evaluating the hypothesis of deception is a strong differentiator between successful and unsuccessful detectors, and (3) successful detectors rely on assurance cues and heavily discount trust cues. Unsuccessful detectors do the opposite.     

Marketing ethics and the techniques of neutralization

The need for conceptual work in marketing ethics is addressed by examining the five techniques of neutralization as a means for partially explaining unethical behaviors by marketing practitioners. These techniques are often used by individuals to lessen the possible impact of norm-violating behaviors upon their self-concept and their social relationships. Borrowed from the social disorganization and deviance literature, the five techniques of neutralization are: (1) denial of responsibility, (2) denial of injury, (3) denial of victim, (4) condemning the condemners and (5) appeal to higher loyalties. Examples of marketing professionals using each of the five techniques are given, and a conceptual model linking the techniques of neutralization with unethical behavior is presented. Finally, relevant research questions are offered for consideration.Scott J. Vitell is Assistant Professor of Marketing at The University of Mississippi. His most important publications include A General Theory of Marketing Ethics (1986) (with Shelby D. Hunt) and Marketing's Contribution to Economic Development: A Look at the Last 30 Years (1985) (with Van R. Wood). Stephen J. Grove is Assistant Professor of Marketing at Clemson University. His articles have appeared in the Journal of Health Care Marketing, the International Journal of Sport Psychology, the Journal of Sport Behavior, the Bulletin of the Association for Business Communication, Simulation and Games, and several national and regional conference proceedings.     

Deception in commercial negotiation

Buyers and sellers of inputs of production, to the degree that they must negotiate directly with each other and cannot have recourse to more impersonal markets, share in certain aspects of bilateral monopoly. Under these circumstances, and assuming profit maximizing goals for each, deception often seems to be an unavoidable characteristic of negotiation.... I hate, detest, and can't bear a lie, not because I am straighter than the rest of us, but simply because it appalls me. There is a taint of death, a flavor of mortality in lies ... — JOSEPH CONRAD, Heart of Darkness.